Commodity prices are expected to remain high for the remainder of the year.
This is according to the Kina Bank CEO and Managing Director, Greg Pawson (Pictured).
He said this when releasing the bank’s July Monthly Economic Update.
“It will be another strong year with segments of the economy, especially agriculture crops maintaining elevated prices and the Porgera mine now in full swing,” Mr. Pawson said.
“Cocoa prices have been high for the past 12 months, and this year coffee has been strong with anticipated supply shortages in major producers such as Brazil and Vietnam. While the negotiations for major resource projects like Papua LNG and P’Nyang continue to be finalised, we are seeing increased activity in the agriculture space which is a positive for PNG’s long-term growth.”
Mr Pawson also noted that whilst there is expected to be upward pressure on prices with the continued depreciation of the PNG Kina, some of the imported inflation effects should soften if the Australian Dollar continues to remain weak.
According to the International Monitory Fund’s recently revised projections for PNG, the country’s resources sector GDP is expected to grow by 5.3% in 2024 due to Porgera’s re-opening, while the growth in the non-resource sector is expected to remain robust at 4.4% growth despite the slow start to the year.
“But despite the near-term outlook, the IMF is very cautious on PNG’s debt sustainability position, noting that the ‘public and public guaranteed debt remains high risk of debt distress,” Mr Pawson said.
Meanwhile, Mr Pawson added that the first half of this year has been overall really strong for Kina Bank’s lending business.
Kina is expected to announce its results for the second half of the year in late August.
